Soros & Hedgies Now Buying the Gold Miners - yeah, really.

Gold Bug Hedge Funds Collectively Report Over $183mm In New Call Option Positions On Miners


May 18, 2013 | By Tekoa Da Silva

While mainstream news sources continue the war against gold and gold-related investments, three of the world’s top performing hedge fund managers have been busy at work building speculative gold positions during the first quarter.

George Soros, John Paulson, and Steve Cohen, who in aggregate control over $60 billion dollars, have been aggressively buying the most speculative vehicles associated with gold: call options on gold mining stocks.

Starting out with, George Soros, billionaire financier and chairman of Soros Fund Manangement LLC, was the target of bearish gold commentary this week issued by Bloomberg. While Bloomberg journalists correctly reported that he’s been cutting his stake in gold, what they failed to mention (which was articulated here on May 16th), was how he reallocated the proceeds.

Soros indeed cut his stake in the GLD gold fund by about $2.5mm—a paltry sum, especially given the fact that he simultaneously purchased a massive $25mm in call options on the GDXJ Junior Gold Miners Index. This purchase outweighs the physical gold sale by a factor of 10—suggesting he expects much greater gains ahead to be had in the junior mining stocks.

Reported exclusively here on February 19th, was Steve Cohen, founder of SAC Capital Partners LP, purchased a $60mm option “straddle” position on the GLD during Q4 2012, which represented the expectation of an explosive move in gold—either up or down in price. Indeed, that is exactly what occurred, and during Q1, SAC Capital Partners closed out that $60mm straddle position (no doubt at a staggering profit), while at the same time buying $66mm in call options on a major gold & copper producer. The firm also maintained over $76mm in long positions on mining equities during Q1.

The largest of the trio in terms of gold positioning for the quarter, was John Paulson, founder of Paulson & Co., which reported owning over $4.389 billion in total gold holdings. Paulson held firm his $3.3 billion stake in GLD, and further added a shocking $92mm in call options on two major gold mining companies.

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Getting out of GLD may be a smart move.

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Originally Posted by JohnQPublic

Getting out of GLD may be a smart move.

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Sure, if you believe that paper gold is going to zero like FOFOA. But if you believe that then buying the gold miners make no sense either as they are all going bankrupt. Personally, I don't think all paper gold is going to zero, just the fraudulent fractional reserved gold like GLD.

agreed, kind of odd with GDXJ being one of their big plays. Also it just printed a new all time low, 10.42

The top performing Hedge Fund Managers recently purchased $183 million in call options in the gold miners:


http://srsroccoreport.com/gold-bug-h...ons-on-miners/